Will Barclays continue to respect this trend line?
Ahead of the bank's third-quarter results in a fortnight's time, independent analyst Alistair Strang checks the tea leaves for indications the share price can pull away from this downtrend.
16th October 2023 07:37
by Alistair Strang from Trends and Targets
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Barclays (LSE:BARC) is due to issue an earnings report on 24 October before the market opens, and it makes us wonder if we’ve noticed something important.
When we reviewed the share three weeks ago, we mentioned our fear that it faced a “protracted walk down the Blue trend” as the price was failing to enact anything interesting, despite breaking the downtrend in September.
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Our fears appear to be realised, the share price showing considerable respect for the trend line and making us wonder if this agony is intended to continue until the day of the earnings report.
Should this be the case, the immediate situation calculates with the potential of weakness below 150.5p allowing for reversal to an initial 146.5p with secondary, if broken, at 143.6p and a price level by which it really should bounce. A nice positive earnings report would certainly provide sufficient excuse for the market to allow Barclays a day in the sun.
Source: Trends and Targets. Past performance is not a guide to future performance.
If we pretend confidence in our scenario, it’s easy to imagine a situation where the market continues to drag Barclays down the trend line. And suddenly, by 24 October confidence suddenly returns. As a result, it is easy to calculate an initial bounce target of 169p, an important price level as it would cheerfully take the share price above the glass ceiling which has formed in the lower 160’s.
This should create a situation where some real, longer-term recovery becomes a viable ambition with our secondary target of 185p making a lot of visual sense. Hopefully, when we revisit the company in three week's time, we can take a more cheery outlook.
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea.
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